economic cycle

revsion notes- basic economic cycle

HideShow resource information
  • Created by: Bob
  • Created on: 07-03-13 22:45

actual v's trend growth

Over time GDP will increase. The trend is a straight linear line however, the actual growth looks a bit like a wave. 

Boom- high aggregate demand- this can be solved by automatic stabilisers- a increase in imports will cause A.D to shift back in as imports is a negative component of the A.D formula

Bust- low aggregate demand- this can also be solved by automatic stabilisers- a decrease in imports will cause A.D to shift out, again, because imports is a negative component of the A.D formula 

1 of 1

Comments

No comments have yet been made

Similar Economics resources:

See all Economics resources »See all Macroeconomic indicators resources »